Game hit by £21.5m loss on lack of hardware releases

Poor sales and no new major hardware releases caused Game Group, the computer
game and console retailer, to crash into the red over the first half of its
financial year.

Master Chief from the hugely successful Halo computer game series. Game expects a strong pipeline of titles being released before ChristmasPhoto: UPPA/Photoshot

By James Hall

6:30AM BST 29 Sep 2010

The fading impact of Nintendo's Wii console helped push the retailer to a £21.5m loss over the six months to July 31, compared to a profit of £10.8m last year. Like-for-like sales fell by 10.9pc, while gross margin was 290 basis points lower. Total sales were £624.6m. Shares in Game, which also owns the Gamestation chain and has 635 UK stores, fell 7.25 to 58.5p.

Peter Lewis, chairman, said that Game had been competing in a "very challenging marketplace and an uncertain economy". Revenues from Nintendo Wii declined by over 40pc, the company said.

However, Ian Shepherd, who joined the group as chief executive in June, said that Game has been increasing its market share. He said: "I absolutely don't think that is a market in structural decline in the long term."

He added that there is an strong pipeline of titles being released before Christmas.

Game is undergoing a store rationalisation process. It is aiming to reduce its UK store count to 550 shops by 2013. The chain will pay an interim dividend of 1.88p on November 18. As well as stores in the UK, Game has around 700 overseas shops. Sales at its international operations fell by 3.1pc over the half.